IMPACT OF DIGITIZATION ON THE NIGERIA INSURANCE INDUSTRY
Need help with a related project topic or New topic? Send Us Your Topic
DOWNLOAD THE COMPLETE PROJECT MATERIAL
IMPACT OF DIGITIZATION ON THE NIGERIA INSURANCE INDUSTRY
Chapter one
1.0 Introduction
1.1 Background of the Study
Over the last two decades, digital technology has revolutionised the world. Digitalization has affected almost every part of human endeavour, including government (e-tax administration system), business (e-commerce and payment solutions), travel (online booking, visa application), publication (e-books, e-news), and even finance (e-banking).
Today, the industrialised world’s services sectors, including insurance, use many types of digital technologies to facilitate their day-to-day operations.
Digitalization is used in the insurance business for information, application submission, proposal preparation, and online contract conclusion, claim notification, potential address changes, and access to customer and contract data (fadun, 2013).
The insurance industry is a significant part of the economy. It is a social technology that reduces the risk of uncertainty. It is a contract that compensates for specified losses in return for a periodic payment known as a premium.
With so many policies on most insurance companies’ bouqet lists and an ever-increasing number of customers and policy holders, it has become nearly impossible for most insurance companies to operate effectively and efficiently without the adoption and use of appropriate digitalization tools (Apampa, 2010).
The Nigerian industry has undergone a series of transformations since the introduction of information communication technology, resulting in changes to processes and activities such as bookkeeping, retrieval of customer information, customer record keeping, deposit and withdrawal, among others.
Insurance businesses have rebuilt themselves using information and communication technology to be more flexible and time mindful (Pankajaski and Shajala, 2012). Customers may now access solutions at any time and from any location, thanks to the ICT revolution.
The digital revolution is significantly transforming the business landscape, and the financial services industry is no exception. Although the ability to simplify things is a fundamental assumption of technological advancement
many financial organisations are approaching digitalization as a paradox. There is a vast range of options for new services or information processing routes.
This transition has existed in some form for decades. Information processing systems and digital-related activities have been rapidly evolving since the 1980s, but they are now infiltrating almost every aspect of business, and the next ten years will likely see more innovations in financial services than the previous fifty years (Canbo-Valverde, 2017).
According to Babalola (2017), millennials can be a major success or failure element for the Nigerian insurance industry both locally and worldwide, depending on how proactive the sector is in capitalising on the good aspects of digitization.
According to data from the Nigerian Communications Commission (NCC) website, mobile internet subscriptions in Nigeria have reached 100.9 million (100,904,668) as of February 2019. This figure is astounding given the country’s population of 195, 875,23 (internet world stat, 2018).
With Nigeria’s present insurance penetration of 0.4%, which is incredibly low when compared to South Africa’s 16.9% and Kenya’s 2.9% (Cynthia Ala, 2018), this is a fantastic achievement because engaging with the industry public becomes easier when focused on insurance.
This presents a challenge to the Nigerian insurance industry as it seeks ways to deepen penetration and boost profitability. Insurers have a unique opportunity to embrace and benefit from the digital wave, which provides a dynamic answer to many of the fundamental issues that afflict the offline world and impede growth today.
The Nigerian insurance industry has never been much of a leader when it comes to technology, but after decades of working with chunky workflows, outdated software, and lots of paper, many insurance companies are starting to get a taste of the tech bug.
Perhaps this is because hungry newcomer start-ups and investors saw an opportunity to do insurance smarter, faster, and better, or perhaps they realised how much time, money, and risk they can save by updating and automating their Whatever the reason
the insurance industry is finally moving forward, and customers are relieved that companies are entering the digital age (Newman, 2017).
Insurers have a unique opportunity to embrace and benefit from the digital wave, which provides a dynamic answer to many of the fundamental issues that afflict the offline world and impede growth today.
For Nigeria’s insurance sector to remain relevant and survive in the future financial services industry and technological world, operators must embrace digital transformation to uncover the latent potential of the twenty-first century.
1.2 Statement of the Problem
Unlike in the past, most insurance products in industrialised countries are now offered through the internet, mobile applications, and other digital applications (ET, 2018). Nigerian insurance companies are trailing behind in terms of business transactions; they continue to conduct business mostly through traditional means.
It is not surprising that just about 1.5% of Nigerian adults are insured today (PWC, 2015). More significantly, practically all insurance businesses in Nigeria use the internet, have a website, and provide online real-time e-insurance services, which has expanded the scope of insurance practice in Nigeria (Fadun, 2013).
However, a thorough utilisation of digital technologies to assist all of their processes and potential online coverage has yet to be implemented.
This study was driven, among other things, by the failure of Nigerian insurance companies to:
Increase insurance penetration.
Reduce public trust and confidence in insurance, and shift public view of the industry.
Increase income, transparency, and marketing effectiveness by leveraging digital technologies.
1.3 Aims and Objectives
This research will look at how digitalization affects insurance marketing in the Nigerian insurance industry.
1.4 Scope of the Study
The scope of the study includes:
To determine what constitutes digitalization.
To investigate various theories concerning digitization
To investigate tasks for which digital technologies can be used in insurance operations.
Need help with a related project topic or New topic? Send Us Your Topic